BorgWarner announces increase in turbocharger production capacity

Editor's Note: This article was orginally published May 1, 2008. Some of the information may no longer be relevant, so please use it at your discretion.

With the demand for more fuel efficient turbocharger technology on the rise around the globe, the board of directors of BorgWarner Inc. has approved investments of approximately $125 million that will increase the company's production capacity of passenger car turbochargers by more than three million units. The increased capacity will support new business awards in North America, Europe and Asia. It will also include construction of new facilities in Mexico and Thailand, as well as the expansion of facilities in Hungary and Poland. The added capacity will produce turbochargers for both diesel and gasoline engines.

"With new business awards, additional capacity is essential to meet customer demands for our market-leading turbocharger technology," says Tim Manganello, BorgWarner's chairman and CEO. "The continued growth of diesel engines around the world and the move to gasoline direct injected engines in North America provide us an opportunity to leverage our turbocharger technology expertise as never before. We will be well positioned to serve our customers' needs as the world market for turbochargers expands. The demand for turbochargers is expected to grow over 40 percent in the next five years, from 19 million units to 27 million as more engines are downsized and turbocharged and more sophisticated engines incorporate multiple turbochargers."

In North America, turbocharger production for passenger cars is expected to more than double from 1 million units today to 2.3 million by 2013. Gasoline and diesel turbocharged engines are a key part of every major automakers' future plans in North America. A turbocharger facility to be built on the BorgWarner campus in Ramos, Mexico, is expected to start production in mid-2010 to supply a major North American gasoline direct-injected engine program.

In Europe, the third expansion of the Hungary plant will accommodate production of an advanced turbocharger system for a new gasoline engine program and programs for small diesel engines with critical European customers. The facility in Poland, which just began construction in March, is already sold to capacity and will move into a second phase expansion immediately. The expansion will double its floor space to accommodate a number of additional programs for small diesel engines.

Demand for small diesel turbocharged vehicles continues to rise sharply in Europe. Diesel turbocharger production is expected to grow 20 percent in Europe from about 11.8 million units today to 14.2 million units in 2013. Over the same period, European gasoline turbocharger production is expected to more than double from about 1.6 million units to 3.8 million units.

Thailand was selected as a strategic location for expansion of turbocharger production in Asia to support both local and ASEAN demand. Current turbocharger demand in Thailand is increasing rapidly with several

Japanese and North American based automakers in the process of expanding production there. With its more advanced and proven technology, BorgWarner stands to gain as the market expands. Turbocharger production in Asia is expected grow 48 percent by 2013 to 6.7 million units.

For more information about BorgWarner Inc., visit borgwarner.com.